Self-managed superannuation funds (SMSFs) are a great way to invest in a variety of asset classes, including ASX shares. Residential property is one potential investment, though that area may be less attractive if SMSFs can’t borrow to buy.

Labor and the Greens have reportedly struck a deal to pass the capital gains tax (CGT) and negative gearing changes announced in the Federal budget, while including a new measure to end SMSF borrowing to buy properties.

With that change in mind, I think there are still plenty of compelling investment opportunities, particularly on the ASX share market.

Commercial properties AKA real estate investment trusts (REITs)

SMSF investors could decide to invest in commercial properties instead, which may provide a higher yield than residential properties.

I like investing in real estate investment trusts (REITs) because they’re easy to transact on the ASX. We can buy into a portfolio of properties in a single investment, and the properties are managed for us by property fund managers.

There are various REITs to choose from, including ones based on industrial properties, farmland and so on.

Three of my favourites in the sector include Rural Funds Group (ASX: RFF), which owns farmland, Centuria Industrial REIT (ASX: CIP), which owns industrial property, and Charter Hall Long WALE REIT (ASX: CLW), which owns a diversified portfolio of properties with long leases.

There are other REIT sectors, like shopping centres and office buildings, though they face headwinds, so I’d be very selective about those two areas and only buy REITs at an attractive discount to their net asset value (NAV).

ASX dividend shares with fully franked dividends

An even more attractive area to invest could be companies that pay attractive, fully franked dividends. Franking credits are refundable tax offsets, which are great for Australian SMSF investors.

ASX blue-chip shares could be some of the most reliable businesses to own. I’m thinking of names like Telstra Group Ltd (ASX: TLS), Bunnings and Kmart owner Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL). They each have a solid dividend yield and a track record of increasing their dividends annually over the last few years.

There are a few other S&P/ASX 200 Index (ASX: XJO) shares that have a strong track record of reliability, including Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and APA Group (ASX: APA). Lovisa Holdings Ltd (ASX: LOV) and JB Hi-Fi Ltd (ASX: JBH) also have an impressive track record of growing dividends over the long-term.

Finally, I’m a big fan of listed investment companies (LICs), which allow investors to diversify and gain exposure to quality assets while also receiving attractive dividend yields and growing payouts.

Some of my favourite LICs for passive income are MFF Capital Investments Ltd (ASX: MFF), WCM Global Growth Ltd (ASX: WQG), L1 Long Short Fund Ltd (ASX: LSF), Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), Hearts and Minds Investments Ltd (ASX: HM1) and WAM Microcap Ltd (ASX: WMI).

The post Where should I invest inside SMSFs instead of property? appeared first on The Motley Fool Australia.

More reading

• How to invest $500, $5,000, and $50,000 on the ASX
• Want a pay rise? These ASX dividend shares keep delivering
• 3 top ASX shares to buy for an SMSF
• 3 ASX stocks that should be in every retirement portfolio 
• 3 ASX dividend favourites are hitting 52-week highs today. Are investors getting defensive?

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Future Generation Global, Hearts And Minds Investments, L1 Long Short Fund, Mff Capital Investments, Rural Funds Group, Wam Microcap, Washington H. Soul Pattinson and Company Limited, and Wcm Global Growth. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group, Mff Capital Investments, Rural Funds Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Lovisa and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Woolworths Group Ltd (ASX: WOW) has not been the easiest ASX share to own recently.

Supermarket investing can look simple from the outside, but the reality is more demanding. Customers want value, suppliers want fair prices, regulators are watching, costs keep moving, and competition does not disappear.

Even so, I think Woolworths could be a smart defensive buy for investors looking ahead to FY27.

A business built around repeat decisions

The appeal of Woolworths starts with frequency.

Most households do not think about groceries as an investment theme. They just keep buying them. Week after week, people need food, cleaning products, personal care items, pet supplies, and household essentials.

That repeat demand gives Woolworths a strong base.

The company has a large store network, a major online presence, loyalty data, supply chain scale, and relationships with millions of customers. That gives it many ways to improve the shopping experience, manage stock, personalise offers, and make the weekly shop easier.

I think that customer connection is valuable.

In retail, small gains can matter. A better app, a faster delivery slot, fewer out-of-stocks, sharper pricing on key items, or a cleaner store experience can all influence where people spend their grocery budget.

Defensive does not mean effortless

Woolworths still has plenty of work to do.

Grocery retail has become politically sensitive because households are under pressure. The company needs to balance margins, customer trust, supplier relationships, staff costs, and investment in stores and technology.

That is a difficult balance.

But I think the best defensive businesses are not the ones with no challenges. They are the ones with enough scale, relevance, and cash generation to keep working through them.

Woolworths has those qualities.

It also has a place in the economy that should remain important regardless of market mood. People may delay a holiday, a new appliance, or a home renovation. They still need groceries.

Why I’d consider buying Woolworths shares

For investors, the question is whether Woolworths can turn its defensive position into acceptable long-term returns.

I think it can.

The company does not need to become a high-growth technology stock. It needs to keep earning customer trust, improve productivity, use data well, invest in online and store operations, and return cash to shareholders over time.

That may sound unexciting, but it can be valuable in a diversified portfolio.

Woolworths can provide a different kind of exposure to the ASX. It is linked less to commodity prices or banking margins and more to everyday household spending. That can make it useful when investors want stability.

Foolish takeaway

Woolworths is not a perfect business, but I think it remains a useful one.

The company sits close to Australian households, has scale that few retailers can match, and operates in a category where demand keeps returning. In FY27, that kind of resilience could be appealing if investors remain nervous about the economy.

The investment case is about owning a business that can keep serving customers, generating cash, and adapting to a tougher retail environment. For investors wanting a defensive ASX share with long-term relevance, I think Woolworths is worth considering.

The post Could Woolworths shares be a smart defensive buy for FY27? appeared first on The Motley Fool Australia.

More reading

• 3 ASX dividend favourites are hitting 52-week highs today. Are investors getting defensive?
• Are Woolworths shares still a buy at a 52-week high?
• This ASX 200 giant just hit a 52-week high. Is it getting too expensive?
• Woolworths shares soar to new multi-year high: Buy, sell or hold?
• One ASX dividend and one ASX growth stock to buy now

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

US stocks have set new records this year while Australia’s benchmark S&P/ASX 200 Index (ASX: XJO) has barely risen.

The S&P 500 Index (SP: INX) is up 9% in the calendar year to date (YTD) and hit a record 7,620.9 points on 2 June.

The Nasdaq Composite Index (NASDAQ: .IXIC) reached a new peak of 27,190.21 points on 1 June, and is up 13% YTD.

The Dow Jones Industrial Average (DJX: .DJI) touched a new high of 52,281.19 points on 17 June, and has lifted 8% YTD.

Meanwhile, at the time of writing, ASX 200 shares have risen by less than 1% in 2026.

Here’s why.

US stocks are smashing ASX shares in 2026

Drew Meredith, a principal advisor at Wattle Partners, says the performance gap can be attributed to artificial intelligence (AI).

In an article on The Golden Times, Meredith explained:

The United States market is being driven by a small number of companies with outsized earnings power, almost all tied to artificial intelligence infrastructure.

Nvidia, Microsoft, Alphabet, Meta, and Amazon have delivered earnings growth that justifies, at least in part, the premium valuations US indices now carry.

Meanwhile, ASX shares are being held back by several elements that have little to do with the quality of our listed companies.

Meredith says:

The Federal Budget’s CGT reform package has weighed on sentiment in financial stocks, property, and healthcare.

The US-Iran conflict has created energy price uncertainty that hurts an economy reliant on stable commodity exports.

The Australian consumer sector is also weak, with confidence falling to one of its poorest levels in 50 years last month.

On top of that, the ASX does not have many companies exposed to the AI earnings cycle in the same way that the US markets do.

Our tech sector is pretty small. In fact, tech shares comprise just 2.1% of the ASX 200.

Should you buy US stocks?

Meredith warns against chasing performance, commenting:

If you are sitting with a predominantly Australian portfolio watching the gap widen, you are probably feeling a pull to do something.

That pull is understandable. It is also the thing most likely to cost you money.

Meredith explains a phenomenon called “recency bias”.

When one market dramatically outperforms another for two or three years, investors feel they were wrong to be diversified. That feeling is not evidence. It is recency bias.

The periods of sharpest US outperformance relative to global peers have consistently been followed by periods of mean reversion.

This happened after the dot-com peak in 2000. It happened in the early years after the GFC when US banks were recovering and Australian miners were printing money.

It does not happen on a schedule you can predict, which is precisely why systematic diversification matters more than tactical shifts.

‘Mean’ is a statistical term for ‘average’. Mean reversion is the idea that share prices don’t stay unusually high or low forever. They tend to move back toward their historical average over time.

How switching from ASX shares to US stocks will cost you

One of the biggest reasons not to switch from underperforming ASX shares into outperforming US stocks today is the tax implications.

Meredith, a retirement wealth specialist, explains it this way:

For many retirees who built their Australian equity positions over decades, switching from Australian to global exposure carries a meaningful capital gains tax cost.

Selling a long-held parcel of BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), or CSL Ltd (ASX: CSL) to buy more Vanguard MSCI Index International Shares ETF (ASX: VGS), Global X Fang+ ETF (ASX: FANG), or iShares S&P 500 AUD ETF (ASX: IVV) is not a free transaction.

If those shares have large embedded gains and you are selling them in a year where the CGT discount is already under political threat, the timing adds an additional layer of risk.

What should you do?

Meredith said investors shouldn’t sell ASX shares while they’re soft today to buy US stocks at a cyclical high.

You may end up paying a big CGT bill for what will become a diminishing performance gap as US stocks undergo mean reversion.

The most prudent step is to check how your portfolio’s composition has changed this year.

Meredith advises:

Check your allocation. Not your recent returns, your allocation.

If your target was 40 per cent Australian equities, 25 per cent global equities, 20 per cent fixed income, and 15 per cent cash two years ago, what is it now?

If market movements have drifted you significantly off target, a disciplined rebalance to target is reasonable. That is not performance chasing. It is maintenance.

If you have cash to invest and want more global exposure, a regular contribution into the plethora of global ETFs could be an option.

The post Why US stocks have hit record highs while ASX shares have barely risen in 2026 appeared first on The Motley Fool Australia.

More reading

• How to invest $500, $5,000, and $50,000 on the ASX
• Want a pay rise? These ASX dividend shares keep delivering
• 3 strong ASX ETFs for beginner investors
• How much passive income can I make from ASX shares?
• The retirement ETF portfolio I’d add to super

Motley Fool contributor Bronwyn Allen has positions in BHP Group and Vanguard Msci Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, CSL, Meta Platforms, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, BHP Group, CSL, Meta Platforms, Microsoft, Nvidia, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.